Summary I'm not buying the dip on Strategy Inc., even though I'm bullish on Bitcoin over a timeframe of 12-18 months. The near-term key risk for MSTR stock, in my view, is mNAV breaking below 1, which can turn equity issuance dilutive and threaten the BTC-per-share accretion story. That said, I am mindful that MSTR has roughly 2.5 years of dividend and interest coverage against preferred and debt obligations. I’m not necessarily bearish about MSTR, but I won’t buy the dip because I can get purer Bitcoin exposure via spot ETFs or directly, without paying Strategy’s equity wrapper. In my last coverage on Strategy Inc. ( MSTR ), I decided to stay on the sidelines and not buy the dip. After the company released Q4 earnings yesterday and after MSCI announced today that it did not proceed with its initial proposal to exclude DATCOs from indexes, the stock is up double digits. To me, this is another clear example that, for some stocks, fundamentals mostly don't matter. You may report a $17.4B unrealized loss on digital assets, but the moment there’s a positive narrative to hold onto, the stock rallies. After these recent developments, I still reiterate my Hold rating on the company. Why? I simply see a more pure exposure to Bitcoin (BTC-USD) through some of the U.S. spot Bitcoin ETFs, which have been reported to experience an outflow of over $3B in January, following outflows of about $2 billion and $7 billion in December and November. On top of that, I am not an institutional investor, and I'm not restricted on what assets I can own. Therefore, I am not limited to buying equities like Strategy or GameStop (GME) to get exposure to Bitcoin. In this piece, I explain a key risk that I see in the near term related to mNAV and why I'm not bearish on Strategy, even though I am not buying the dip. The mNAV Discount Is Breaking the BTC-per-share Accretion Narrative Let me first explain two metrics used among analysts to analyze Strategy. These are the Bitcoin NAV value and the mNAV. From an earlier financial report last year, here is how the company defines the Bitcoin NAV value: “Bitcoin NAV” for these purposes means the market value of our bitcoin holdings calculated by multiplying the current market price of one bitcoin by the total number of bitcoins that we hold. Although it incorporates the label “NAV,” it is not equivalent to “net asset value” or “NAV” or any similar metric in the traditional financial context. The other relevant metric is the mNAV. Here is the official definition from that report: mNAV represents a multiple of Bitcoin NAV, calculated by dividing Enterprise Value (as defined below) by Bitcoin NAV (as defined below). You may consult the actual report for more details. Now, in plain English, Bitcoin NAV is just what Strategy’s Bitcoin stash is worth right now. mNAV tells you how expensive Strategy is relative to its bitcoin stash, after accounting for how the company is financed. There are three possible scenarios: mNAV = 1.0x: the whole company is valued roughly equal to the value of its bitcoin pile. mNAV > 1.0x: investors are paying a premium versus the bitcoin pile. mNAV The company has a live page where you can see the historical value of this metric: Strategy As I'm writing, mNAV is 1.13 (down over 40% YOY). The risk here is if mNAV breaks below 1. Let me explain why. If mNAV goes below 1, issuing shares is usually dilutive. In other words, the company is selling equity to buy BTC at a discount to the bitcoin value it represents, so each new raise tends to reduce the bitcoin-per-share value. By now, you should see the following downward spiral effect if mNAV goes below 1: mNAV falls below 1. The company decides to raise money to fund obligations, reserves, or keep buying BTC to maintain the KPI narrative. They raise the money, which pressures the bitcoin-per-share metric. This may lead to investors assigning a lower multiple to the company. More often than not, that lower multiple comes with a selloff. If the stock price drops, EV goes down (think market cap), and mNAV moves with it. Repeat from 2. The question now is what are the obligations of the company, and how much cash do they have to delay any future raise? From the latest 8-K, here are the aggregate redemption values of outstanding perpetual preferred stock series as of December 31, 2025: STRF (10.00%): $1.363B liquidation preference STRC (variable, see table below): $2.959B liquidation preference STRK (8.00%): $1.398B liquidation preference STRD (10.00%): $1.402B liquidation preference STRE (10.00%): $0.910B liquidation preference. Strategy On the debt side , the latest balance sheet shows long-term debt at $8.16B, with only $31.3M as the portion of long-term debt: Strategy On the liquidity side, the company reported cash and cash equivalents of $2.3B at the end of Q4. That's a lot of fiat currency, in my view. Therefore, we're not talking about a few quarters of cash runway. In fact, according to the last earnings report, their $2.25B USD reserve represents “2.5 years of dividend and interest coverage.” Call me crazy, but 2.5 years is more than enough for Bitcoin to resume the next leg of its bull run. I already discussed my long-term view on Bitcoin in this recent article . Why I'm Not A Bear On Strategy The risk of mNAV going below 1 is high, but the company has a runway of 2.5 years to cover dividend and interest coverage. That's plenty of time for Bitcoin to recover. While I think Strategy may pause Bitcoin purchases if mNAV goes below 1, that is not enough to (meaningfully) re-rate the stock. On top of that, it is my strongest view that one should never go short on a stock where there is (or was) a certain level of disconnection between fundamentals and price action. Take the example of Tesla, where shorts can't seem to understand that price action moves on the narrative and not on fundamentals. Stories are powerful, and I believe Strategy has a powerful narrative as the world's largest Bitcoin treasury. Now, would I ever get exposure to Bitcoin through Strategy? No. There are plenty of ETFs like IBIT, FBTC, or GBTC that offer exposure to Bitcoin. On top of that, I can own Bitcoin directly from a crypto exchange. That said, I am mindful that some institutional funds may be restricted on what assets they can buy, and that's where Strategy comes in as the closest exposure to Bitcoin in the public equity markets in the U.S. (ex ETFs). On valuation, I don't think investors on the bid side are actually looking at the 99x forward EV/Sales multiple. If they did, we wouldn't have seen today's double-digit jump in share price. Conclusion Strategy is up about 20% at the time of writing this article after reporting Q4 earnings. The major media outlets seem to be concerned with the $17.4B unrealized loss on digital assets. I think fundamentals are noise for this stock, as evidenced by today's price move. Adding to the upside story, MSCI did not proceed with its initial proposal to exclude DATCOs (crypto-heavy balance sheets) from indexes. After this news, the near-term forced selling risk from passive funds was reduced, which I think was a major overhang on the stock, based on today's move. On the valuation front, mNAV is still above 1, after a 40% drop in the last 12 months. Even if mNAV goes below 1, the company has a runway of 2.5 years to cover its dividend and interest expenses. I strongly believe that's enough time for Bitcoin to recover and initiate the next leg of its bull run.